Just four days after 12,000 activists circled the White House in protest of TransCanada’s Keystone XL tar sands oil pipeline, President Obama announced the $7 billion project will be subject to reevaluation by the State Department.

“The president deserves thanks for making this call–it’s not easy in the face of the fossil fuel industry and its endless reserves of cash,” said Bill McKibben, founder of Tar Sands Action, the group responsible for organizing the 12,000 person demonstration on November 6 in addition to several other highly publicized protests at the White House over the summer.

Russ Girling, TransCanada’s President and CEO, remains confident that even with further examination, the pipeline will eventually be approved. “This project is too important,” Girling explained. “If Keystone XL dies, Americans will still wake up the next morning and continue to import 10 million barrels of oil from repressive nations, without the benefit of thousands of jobs and long-term energy security. That would be a tragedy.”

Keystone XL was slated to cross six states and the Ogallala Aquifer, which provides drinking water to millions of Americans and irrigation to $20 billion a year in agriculture and food production. In addition to this 1,700-mile route from Alberta, Canada to refineries in Texas, 13 previous routes for the pipeline were reviewed and rejected by the State Department, in part because they were longer and would have raised the project’s price tag.

“The Keystone XL pipeline has undergone a lengthy and thorough review process in which the State Department itself concluded that the proposed route was the best of the 13 routes considered,” U.S. Chamber of Commerce President and CEO Thomas J. Donohue affirmed in a statement. “The decision to delay the pipeline permit sends a signal to all Americans that even in the face of sustained high unemployment and instability overseas, jobs and energy security are not a priority.”

Dr. Kerri-Ann Jones, assistant secretary of the State Department’s Bureau of Oceans, Environment and Science (OES), emphasized that OES will be looking at routes not previously considered, specifically one that would avoid Nebraska’s Sandhills region, a stretch of unspoiled prairie dunes and wetlands that covers the Ogallala Aquifer.

Environmental groups argue that no matter what path is ultimately deemed appropriate for the Keystone XL, the probability for toxic oil leaks and spills will remain a risky gamble that could jeopardize environmental health, public health and the economy. TransCanada’s Keystone Phase 1 pipeline, which began transporting tar sands oil from Alberta to Midwest refineries in June of 2010, has been the source of over a dozen oil since it opened and 21 “incidents” of released oil in Canada, according to the Transportation Safety Board of Canada.

“I don’t think there is an alternative route that solves the problems of this project,” said Friends of the Earth’s climate director, Damon Moglen.

President Obama will endorse a thorough, government-funded review to illuminate Keystone XL’s potential damages to the public and environment. “Because this permit decision could affect the health and safety of the American people as well as the environment, and because a number of concerns have been raised through a public process, we should take the time to ensure that all questions are properly addressed and all the potential impacts are properly understood,” Obama said in a statement released by the White House. “The final decision should be guided by an open, transparent process that is informed by the best available science and the voices of the American people.”

TransCanada submitted an Environmental Impact Statement (EIS) to the State Department, but uncertainties over its accuracy roused a great deal of controversy. Allegations surfaced that Cardno Entrix, the Houston-based consulting company hired by TransCanada for the review, wrote a deceptive report for their employer to deliberately sway legislators to approve the Keystone XL.

“It is now incumbent on the Obama administration to ensure that a fair, impartial review of the pipeline’s impacts is conducted,” noted Friends of the Earth President Erich Pica. “This means that the United States Environmental Protection Agency should lead in reviewing potential environmental and public health impacts and that the contractor Cardno Entrix must play no further role.”

Supplementary OES review will examine the wide range of highly debated job estimates associated with Keystone XL’s approval. “We’re trying to conduct the analysis that gets us to a number that we know is accurate,” Jones said.

With extended analysis underway, the White House’s decision on whether Keystone XL is in the national interest will be delayed until after the 2012 presidential election, Obama officials said. “Some in our movement will say that this decision is just politics as usual: that the president wants us off the streets—and off his front lawn—until after the election, at which point the administration can approve the pipeline, alienating its supporters without electoral consequence,” McKibben wrote on tarsandaction.org.

Regardless of political strategy, the delay will be a major financial blow to TransCanada. “Each day the project is delayed will cost TransCanada $1 million,” said company spokesperson James Millar. “If delays extend beyond the end of 2011, these costs will increase.”

This past Sunday, Canadian Prime Minister Stephen Harper revealed his country will now focus on exporting more tar sands oil, which emits 5-15% more greenhouse gases in extraction than conventional crude oil, to Asia. “That will be an important priority of our government going forward and I indicated that yesterday to the president of China,” he told press at the Asia-Pacific Economic Cooperation forum.

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